Texas Gov. Greg Abbott effectively pauses new data center projects pending statewide grid audit

Texas Gov. Greg Abbott has ordered state regulators to audit pending data center projects seeking connections to the state's electric grid, a move ERCOT says effectively pauses those projects as Texas grapples with soaring electricity demand driven by artificial intelligence infrastructure.

Abbott on Monday directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT) to review pending data center projects and deny grid connection requests for facilities that fail to meet state requirements.

ERCOT told Fox News Digital the governor's directive "effectively pauses all data center projects."

"ERCOT is reviewing Governor Abbott's letter concerning data centers and will work with the Public Utility Commission of Texas to implement the Governor's directive, including postponement of the Batch Zero transmission planning study," the grid operator said in a statement.

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The move comes as Texas sees a surge in demand from artificial intelligence and cloud computing facilities. ERCOT told Fox News Digital that about 90% of the 474 gigawatts of projected large-load interconnection requests currently under review are from data centers — more than five times the state's record peak electricity demand.

"Our top priority is to protect Texans' safety and quality of life," Abbott said in a statement, according to Axios. "Texans must come first."

As part of the review, Abbott directed regulators to gather additional information from companies seeking grid connections, including whether facilities plan to generate some of their own electricity, as well as their projected annual and peak electricity demand, water consumption and water sources.

The directive follows Abbott's recent push to tighten oversight of the rapidly expanding data center industry. Last week, he said AI data centers looking to build in Texas should bring their own power, reuse their own water and lower electricity costs for residents.

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Texas has become one of the nation's largest hubs for data center development, thanks in part to generous tax incentives. The Texas Tribune previously reported the state provides more than $1 billion annually in tax breaks for qualifying projects.

Public Utility Commission of Texas Chairman Thomas Gleeson said the agency is working with ERCOT to implement Abbott's directive.

"We appreciate Gov. Abbott's directive and will continue to work closely with ERCOT to ensure these requirements, along with those laid out in our July 17, 2026, letter to Gov. Abbott, are fully carried out on behalf of the people of Texas," Gleeson said in a statement to Fox News Digital.

Fox News Digital also reached out to Abbott's office and the Data Center Coalition for comment.